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You can look at Moore’s law in more than one way. You can see it in its literal sense, applied to computers doubling in speed every 18 months or so. Or you can see it as a metaphor for any type of technology that sees regular increases in speed or power. The last few days have seen announcements of several new technologies, variously falling into one or even both of the camps. Strap yourself in for a new stage in the evolution of technology.

First there is solar power. Earlier this year economist Paul Krugman was slated by those in the know when he suggested that solar power was seeing its power increase at a rate that was commensurate with Moore’s Law. The mistake Krugman made was to not realise there is a theoretical limit to solar power. It is called the Shockley-Queisser limit named after William Shockley and Hans Queisser, who proposed that the theoretical maximum efficiency of a solar panel is 34 per cent. In short, there is a just a physical limit to how much energy solar power can generate, and we appear to be pretty close to that limit.

Enter stage right the Nano-Science Center at the Niels Bohr Institute in Denmark, which is connected to the University of Copenhagen. It has been working on nano-wires, or what some might call miracle technology.

A nanometre is a billionth of a metre. O.1 of a nanometre is the size of a helium atom. Nano technology is engineering at an incredibly small scale. Nano-wires is an exciting application of nanotechnology.

“It turns out,” or so suggests an announcement on the University of Copenhagen web site, “ that the nanowires naturally concentrate the sun’s rays into a very small area in the crystal by up to a factor 15. Because the diameter of a nanowire crystal is smaller than the wavelength of the light coming from the sun it can cause resonances in the intensity of light in and around nanowires. Thus, the resonances can give a concentrated sunlight, where the energy is converted, which can be used to give a higher conversion efficiency of the sun’s energy.”

The announcement continues: “The typical efficiency limit – the so-called ’Shockley-Queisser Limit’ – is a limit, which for many years has been a landmark for solar cells efficiency among researchers, but now it seems that it may be increased.” The new break-through”, continues the announcements “will have a major impact on the development of solar cells, exploitation of nanowire solar rays and perhaps the extraction of energy at international level. However, it will take some years before production of solar cells consisting of nanowires becomes a reality.”

So that’s Moore’s law at work in solar energy.

But the University of Copenhagen announcement also made reference to nanowires having potential use in quantum computers.

This brings us to Moore’s Law in its original meaning, relating to computers doubling in power every 18 months or so.

Enter stage left IBM. Big Blue has just picked up the Swiss Tell Award for investment in new nanotechnology. IBM stated recently: “Carbon nanotubes and scanning probes derived from the atomic force microscope – cousin of the scanning tunnelling microscope – show particular promise in enabling dramatically improved circuits and data storage devices.” So, in English, the words to note are improved circuits and data storage devices. In short, IBM is working on nano technology to make computers much faster. We may or may not be close to reaching some kind of limit to computer power based on traditional silicon type technology. But IBM is exploring alternatives.

Big Blue put it this way: “IBM’s research into nano-scale structures that self-assemble may one day obviate the need to ’hand-position’ atoms. Nanotechnology will allow the design and control of the structure of an object on all length scales, from the atomic to the macroscopic enabling more efficient and vastly less expensive manufacturing processes and providing the hardware foundation for future information technology.”

And finally there is a company called Hyperoptic which is set to offer broadband speeds of one gigabit a second to some locations in London. That’s ten times faster than the fastest services from Virgin Media and BT, which are themselves around ten times faster than the service most of us are used to.

Some economists are cynical about the effect technology is having on the economy. Their cynicism may or may not be justified up to now. But the point is that – thanks to Moore’s Law in the sense being used here – technology is set to have an ever more profound impact on our lives and the economy. This is both exciting and frightening, with unpredictable consequences for jobs, and the way in which wealth is distributed. Economists, in making their forecast for the next few years, are totally failing to factor this in.

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“You can see the computer age everywhere but in the productivity statistics,” said the economist Robert Solow once. It’s odd. Did you know that if the family saloon car from the 1960s had seen its top speed increase at a trajectory consistent with Moore’s Law, today it would be able to reach speeds in excess of the speed of light. This newsletter would not be sent by email, it could be hand delivered to every reader. Yet despite all that, there is precious little evidence of the revolution that is the computer age creating new wealth.

This has led some economists to argue that the modern day computer revolution is not great shakes.

One such economist is Robert J Gordon. He reckons there have been three industrial revolutions. The first once occurred between 1730 and 1830. The second one occurred in the late 19th century, and the third one began 50 years ago.

Of the three Gordon says the second was the most significant. Martin Wolf, the ‘FT’s’ guru on the economy, took a look at Gordon’s report, and paraphrasing him said: “Today’s information age is full of sound and fury signifying little. Many of the labour-saving benefits of computers occurred decades ago. There was an upsurge in productivity growth in the 1990s. But the effect petered out.”

Well, Mr Gordon makes some interesting points, but he just happens to be wrong.

The topic of this second industrial revolution has been covered here before. According to Vaclav Smil, in his book ‘Creating the Twentieth century: Technical innovations of 1867-1914 and their lasting impact’, the period between those two dates saw the foundation of nearly all of the 20th century’s innovations put in place. Smil says: “Neither the pre-1860 advances nor the recent diffusion and enthusiastic embrace of computers and the Internet are comparable with the epoch-making sweep and with the lasting impacts of that unique span of innovation that dominated the pre-WWI generations.” Smil calls this period the age of symmetry.

Here are two points that get forgotten, Point one: the internet is the greatest tool for creating collaboration ever invented. Innovation occurs via collaboration, as ideas build upon ideas. Thanks to the internet, and providing patent law doesn’t get in the way, we are set to see a new revolution in innovation that will made Smil’s age of symmetry seem more like the age of the snail’s pace.

The second point is Moore’s Law. Computers are still doubling in speed every 18 months or so, see this article on the latest wonder material graphene, which could mean an acceleration in Moore’s Law: Manchester researchers unveil ‘graphene roadmap’

Bandwidth speeds are rising at a similar pace. Breakthroughs in our studies of the genetic code are following a Moore’s Law type trajectory. Even solar energy is becoming more efficient all the time. The key thing here is to bear in mind that when something is doubling every 18 months to two years, we might not even notice it at first. The science fiction films and novels of the 1950s envisaged computers in the distant future that were less advanced than the computers with which we are all familiar today.

Double one pound and you only still only have two pounds. But double one pound twenty times and you have one million pounds. Double it 45 or so times, and you have a number which is greater than the world’s total GDP.

Cynics say technology is not creating growth, and the age of growth is near its end. They are as wrong as you can be.

Scully says that Jobs had this dream of a combining consumer electronics with computers. “In the 1990s,” said Scully, “with Moore’s Law and other things, the homogenization of technology, it became possible to begin to see what consumer products would look like but you couldn’t really build them. It really hasn’t been until the turn of the century that you sort of got the crossover between the cost of components, the commoditization and the miniaturization that you need for consumer products.” In other words, Apple struggled, because technology was not powerful enough to realise Job’s dream. But when, thanks to Moore’s Law, that changed in a very short time frame Apple went from almost bust to being the largest company in the world.

See it in terms of a metaphor: the super cooling of water. It is generally assumed water freezes at zero. This is not true, rather ice melts at zero. Pure water can freeze at temperate round minus 48 degrees. But when it does freeze, it does so instantly.

Cynics say technology is not transforming the economy. But the point is that, thanks to Moore’s Law, within 18 months of technology leading to a modest rise of GDP, it will lead to a much bigger rise. Within five years of that moment, technology’s impact on the economy will be profound indeed.

Anyway, it was rather good to see an actual economist make a similar point. Looking at Robert Gordon’s report, Paul Ashworth, Chief US Economist at Capital Economics, said last week: “As far as the information processing revolution is concerned, Moore’s Law provides us with a critical reason why we should expect the benefits and innovation in the second 50 years of this revolution to be much bigger than what we saw in the first 50 years…The constant doubling is deceptive because it is initially unremarkable, but there comes a point in the exponential progression when the information processing abilities of computers suddenly appear to explode, making it possible for computers to perform complex tasks that only a few years before still seemed like science fiction.”

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